Core viewpoints
1) A number of shipping companies announced to increase the freight and surcharges, including Heberot, Wanhai Shipping, MSC, Delta, Maersk, etc.
2) The Baltic crude oil freight index BDTI/BCTI continued to decline during the Easter holiday in the West. With the voluntary production reduction announced by OPEC+extended to the end of June, and the centralized maintenance of Asia Pacific refineries started from March to May, the procurement demand will fall accordingly.
3) The French shipping giant Delta Steamship established two new companies to actively invest in electric vehicles and multimodal transport.
4) The Italian trade union port workers plan to strike all over Italy from April 3 to 5, and port services may be interrupted.
Industry dynamic information
Industry overview: From the performance of shipping sub sectors relative to Shanghai Shenzhen 300, the shipping port sector rose this week (April 1 to April 5). The shipping sector rose 3.65% this week, while the port sector rose 2.98%.
Shipping ports: Several shipping companies announced to increase the freight and surcharges, and the Baltic crude oil freight index declined due to demand
A number of shipping companies announced increases in freight and surcharges, including Heberot, Wanhai Shipping, MSC, Dafei, Maersk, etc. On March 28, Herbert announced that from April 8, 2024, he would increase the freight from Asia (excluding Japan) to the west coast of Latin America, Mexico, the Caribbean, Central America and the east coast of Latin America. The official website of MSC announced the latest freight rates for all new bookings from northern Europe (including Britain and the Baltic coast), the Mediterranean region (including the Western Mediterranean, the Adriatic, the Eastern Mediterranean, Greece and Turkey), and all ports of the Black Sea to the Far East and the Middle East Gulf, which will take effect from April 8 until further notice.
The Baltic crude oil freight index BDTI continued to decline during the Easter holiday in the West. The BDTI (crude oil transportation) index was 1122 points, down 0.35% month on month and 26.41% year on year. The BCTI (refined oil transportation) index was 968 points, down 2.55% month on month and 11.77% year on year. With the voluntary production reduction announced by OPEC+extended to the end of June, and the centralized maintenance of Asia Pacific refineries started from March to May, the procurement demand will fall accordingly.
The French shipping giant Delta Steamship established two new companies to actively invest in electric vehicles and multimodal transport. On the one hand, by investing in the Flexis joint venture, Dafei, together with Renault and Volvo, has jointly developed electric light trucks and entered the field of electric vehicles to meet the growing demand of the European logistics market. On the other hand, Dafei has also cooperated with Italian multimodal transport company GTS, announcing the establishment of a strategic joint venture ECN, integrating the advantageous resources of both sides, and providing reliable, economical and low-carbon transport services for the European market.
The Italian trade union port workers plan to hold strikes across Italy from April 3 to 5. The purpose of the strike is to demand higher wages and work standards. The participants will carry out sporadic work stoppages from April 3 to 4, and there may be a larger strike on April 5. During the affected period, port services and shipping may be interrupted and may last until April 6. There may be pickets and demonstrations at ports all over the country; High security and local traffic disruption may occur in any protest. The possibility of conflict between demonstrators and law enforcement personnel during the demonstration cannot be ruled out. It is expected that by April 5, several ports will have road restrictions and operation shutdowns, ranging from 2 hours to 24 hours. In addition to the interruption of port operation, the traffic of vehicles exceeding 7.4 tons was restricted from 9:00 to 14:00 local time on April 2.
Centralized transportation: maintain the "buy" rating of COSCO Shipping, OOCL and Haifeng International. 1) In 2023, COSCO Marine Holdings will realize a net profit attributable to the parent company of 23.86 billion yuan.
Assuming 50% dividend, the corresponding cash dividend per share is 0.742 yuan. 2) Since December, affected by attacks by Yemeni Hussain militants, Maersk and Hebrot announced that they would suspend their container ships' navigation in the Red Sea. If all ships need to bypass the Cape of Good Hope, the effective capacity of the Asia Europe route will lose about 21%.
In the first quarter of 2024, COSCO's performance is expected to exceed expectations. 3) On August 31, 2023, COSCO Marine Holdings will begin to implement the repurchase of A shares and H shares. The A-share repurchase has been completed by the end of November 2023, with a cumulative repurchase of 60 million shares, accounting for 0.371%, and the average repurchase price of 9.72 yuan/share. H-share repurchases are still in progress. By the end of 2023, the company had repurchased 97.949 million H-share shares, accounting for 0.606% and 2.9197% of Hong Kong shares, of which 41.467 million H-share shares had been repurchased, and the cancellation was completed on November 17, 2023.
Oil transportation: China's crude oil import demand may decline in the short term, and the freight rate of LR2 tankers will remain high, which will promote oil traders to switch to MR and other ship types of transportation. Maintain the "buy" ratings of COSCO Energy H shares and Scorpio Tankers.
